My pick of last week’s news is Government proposals to help more people in problem debt which will let more people access DROs. If anyone wonders why it is needed, look at the next article Monthly Insolvency Statistics which shows IVA sales – many possibly mis-selling – surging.
- Government proposals to help more people in problem debt gov.uk: Major changes proposed to DRO criteria – 20k limit to be increased to 30k, £50/month disposable income to be increased to £100. It’s a good start!
- Monthly Insolvency Statistics, December 2020 gov.uk The numbers of DROs and bankruptcies in December 2020 were 40%and 26%lower respectively than in December 2019… There were, on average, 7,918IVAs registered in each of the 3months ending December 2020,38% higher than the rolling 3-month average observed in the same period ending December 2019.
FCA proposes update to guidance on mortgages and consumer credit repossessions FCA: Proposes that mortgage repossession banned until 1st April but firms will be able to repossess goods and vehicles from 31 January 2021.
Calls for Covid debt relief package as county court judgments soar Guardian: The record quarterly rise of nearly 82,000 judgments [from Q3 to Q4] suggests creditors are no longer showing the same restraint as they did at the start of the crisis, when regulators stepped in to protect vulnerable borrowers.
- Are Klarna and other BNPL Lenders the New Wonga? Advice Scotland blog: Any new regulations will be vital if UK Consumers are to be protected from what is currently a poorly regulated financial market and should take the form of limiting the number of agreements that are exempt under the Consumer Credit Act 1974.
- Next offers a £10 pay-later discount Times (paywall): Its shops are suffering, but its finance unit is flying. No wonder, with so many people in debt
- Next/consumer credit: the loan view FT (paywall): Next’s finance segment generated margins of 54% the previous year, more than tenfold than on basic retail.
Coronavirus: Impact on household savings and debt House of Common Library research paper: official statistics on household savings and debt since the beginning of the coronavirus pandemic, and discusses the groups which are more likely than average to have experienced an increase in household debt.
Government urged to redraft ‘watered down’ evictions ban Law Gazette: “These changes mean that families and individuals can be evicted now because of arrears that have come about solely due to the coronavirus crisis”.
Self Assessment customers use online tax payment plans to help spread the cost gov.uk: An online plan can be set up for amounts of up top 30k, up from 10k last year.
Crippling rates loom for firms as experts warn new crisis in spring will be worse than 2008 Mail: Banks have issued £35 million of loans at rates of more than 14.99 per cent – even 34.9 per cent in one case – to firms shuttered by the pandemic, Treasury documents show.
Benefits & other news
We gambled away £11.8 million: it’s time to make the betting industry pay Times (paywall): A group of 30 people, from all walks of life, want tougher regulation to save others from the same fate.
Interview – Jack Monroe on food poverty and fury: ‘I just wake up, look at the news, and get angry’ Guardian: half a red pepper, a quarter of an onion. What kind of company would employ someone to make sure no family gets too much onion?
The temporary £20 a week Universal credit increase due to end in April:
- Rishi Sunak plans £500 gift for benefit claimants to avoid Tory uprising Times (paywall): an attempt to placate some Tory MPs, not help people who need it.
- ‘Money is tight’ – Living on Universal Credit in lockdown BBC: We talk to some of the people who have had to rely on [UC] to get them through the pandemic.
- Poor families’ living costs have surged during pandemic Guardian: Thinktank urges ministers to keep £20 universal credit top-up and increase other benefits
UK Poverty 2020/21 JRF’s annual report: This report highlights early indications of how poverty has changed in our society since the start of the coronavirus outbreak
- For a single parent in poverty, pressures keep piling up JRF: The events that swept Melanie into poverty began with being made redundant whilst pregnant with her son and the subsequent break-up of her marriage, and her husband leaving her in significant financial difficulty.